VFH vs. XLF

Last updated Apr 1, 2026

Compare and contrast key facts about Vanguard Financials ETF (VFH) and Financial Select Sector SPDR Fund (XLF).

VFH and XLF are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. VFH is a passively managed fund by Vanguard that tracks the performance of the MSCI US Investable Market Financials 25/50 Index. It was launched on Jan 26, 2004. XLF is a passively managed fund by State Street that tracks the performance of the Financial Select Sector Index. It was launched on Dec 16, 1998. Both VFH and XLF are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.

Performance

VFH vs. XLF - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Financials ETF (VFH) and Financial Select Sector SPDR Fund (XLF). The values are adjusted to include any dividend payments, if applicable.

VFH vs. XLF - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VFH Vanguard Financials ETF	-9.21%	14.91%	30.44%	14.17%	-12.31%	35.22%	-1.96%	31.57%	-13.52%	19.99%
XLF Financial Select Sector SPDR Fund	-9.40%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%

Returns By Period

The year-to-date returns for both stocks are quite close, with VFH having a -9.21% return and XLF slightly lower at -9.40%. Both investments have delivered pretty close results over the past 10 years, with VFH having a 12.29% annualized return and XLF not far ahead at 12.44%.

VFH

• 1D: 2.17%
• 1M: -3.48%
• YTD: -9.21%
• 6M: -7.19%
• 1Y: 2.67%
• 3Y*: 17.94%
• 5Y*: 9.33%
• 10Y*: 12.29%

XLF

• 1D: 2.09%
• 1M: -3.51%
• YTD: -9.40%
• 6M: -7.56%
• 1Y: 0.65%
• 3Y*: 17.25%
• 5Y*: 9.34%
• 10Y*: 12.44%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VFH vs. XLF - Expense Ratio Comparison

VFH has a 0.10% expense ratio, which is lower than XLF's 0.13% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

XLF

Financial Select Sector SPDR Fund

VFH

Vanguard Financials ETF

Return for Risk

VFH vs. XLF — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VFH

VFH Risk / Return Rank: 17
VFH Sharpe Ratio Rank: 16
VFH Sortino Ratio Rank: 16
VFH Omega Ratio Rank: 16
VFH Calmar Ratio Rank: 18
VFH Martin Ratio Rank: 18

XLF

XLF Risk / Return Rank: 14
XLF Sharpe Ratio Rank: 13
XLF Sortino Ratio Rank: 13
XLF Omega Ratio Rank: 13
XLF Calmar Ratio Rank: 15
XLF Martin Ratio Rank: 15

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VFH vs. XLF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Financials ETF (VFH) and Financial Select Sector SPDR Fund (XLF). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	VFH	XLF	Difference
Sharpe ratio Return per unit of total volatility	0.13	0.03	+0.10
Sortino ratio Return per unit of downside risk	0.32	0.18	+0.14
Omega ratio Gain probability vs. loss probability	1.05	1.02	+0.02
Calmar ratio Return relative to maximum drawdown	0.27	0.13	+0.14
Martin ratio Return relative to average drawdown	0.79	0.38	+0.41
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VFH vs. XLF - Sharpe Ratio Comparison

The current VFH Sharpe Ratio is 0.13, which is higher than the XLF Sharpe Ratio of 0.03. The chart below compares the historical Sharpe Ratios of VFH and XLF, offering insights into how both investments have performed under varying market conditions. These values are calculated using daily returns over the previous 12 months.

Sharpe Ratios by Period

	VFH	XLF	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.13	0.03	+0.10
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.48	0.50	-0.02
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.55	0.56	-0.02
Sharpe Ratio (All Time) Calculated using the full available price history	0.24	0.20	+0.04

Correlation

The correlation between VFH and XLF is 0.98, which is considered to be high. That indicates a strong positive relationship between their price movements. Having highly-correlated positions in a portfolio may signal a lack of diversification, potentially leading to increased risk during market downturns.

Dividends

VFH vs. XLF - Dividend Comparison

VFH's dividend yield for the trailing twelve months is around 1.61%, which matches XLF's 1.60% yield.

	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VFH Vanguard Financials ETF	1.61%	1.55%	1.75%	2.08%	2.31%	1.87%	2.21%	2.17%	2.30%	1.53%	1.63%	2.00%
XLF Financial Select Sector SPDR Fund	1.60%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%

Drawdowns

VFH vs. XLF - Drawdown Comparison

The maximum VFH drawdown since its inception was -78.61%, roughly equal to the maximum XLF drawdown of -82.69%. Use the drawdown chart below to compare losses from any high point for VFH and XLF.

Drawdown Indicators

	VFH	XLF	Difference
Max Drawdown Largest peak-to-trough decline	-78.61%	-82.69%	+4.08%
Max Drawdown (1Y) Largest decline over 1 year	-14.75%	-14.79%	+0.04%
Max Drawdown (5Y) Largest decline over 5 years	-25.66%	-25.81%	+0.15%
Max Drawdown (10Y) Largest decline over 10 years	-44.42%	-42.86%	-1.56%
Current Drawdown Current decline from peak	-11.97%	-12.01%	+0.04%
Average Drawdown Average peak-to-trough decline	-18.62%	-20.10%	+1.48%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.93%	4.90%	+0.03%

Volatility

VFH vs. XLF - Volatility Comparison

Vanguard Financials ETF (VFH) and Financial Select Sector SPDR Fund (XLF) have volatilities of 4.85% and 4.75%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VFH	XLF	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.85%	4.75%	+0.10%
Volatility (6M) Calculated over the trailing 6-month period	11.76%	11.45%	+0.31%
Volatility (1Y) Calculated over the trailing 1-year period	19.97%	19.29%	+0.68%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.38%	18.69%	+0.69%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.56%	22.19%	+0.37%